Economy / Brazil
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Bank Taskforce To Oversee Rising Credit Risk
September 2008 | Economic AnalysisSorry, you must be a subscriber to view this article in full. If you are a subscriber please login.
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The proposed formation of a joint taskforce for Brazil's banking sector comes at a time when concerns about profitability of Brazilian banks are on the rise. Tighter credit conditions and prospects of slower economic growth next year point to greater risks of declining asset qualities. A moderation in credit growth is almost inevitable amid the current global financial and economic climate, and with interest rates still rising, we believe that the most likely immediate outcome from a joint taskforce will be greater consolidation among banks and efforts to set ceilings on gearing ratios.